Prepare journal entries that sydney retailing

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Reference no: EM133492572

Case: Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions.

May 11 Sydney accepts delivery of $40,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $30,000. Sydney pays $345 cash to Express Shipping for delivery charges on the merchandise.
May 12 Sydney returns $1,400 of the $40,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,050.
May 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately.

Assume that both buyer and seller use a periodic inventory system and the gross method.

Question 1: Prepare journal entries that Sydney Retailing (buyer) records for these three transactions.
Question 2: Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.

Reference no: EM133492572

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